28 November 2008
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Johannesburg — TAX authorities around the world are making efforts to reform their tax systems.
Research carried out by PricewaterhouseCoopers and the World Bank in the past four years recorded 126 reforms aimed at reducing tax rates or the time and cost of complying with tax laws.
The trend across all regions has been to lower the total tax rate paid by business .
In 2004 the average total tax rate was 50,6% of commercial profit . Last year it had fallen to 49,3%.
According to the 2008- 09 study, the time taken to comply with tax laws dropped by an average of 16 hours a year .
The introduction of electronic filing has been a popular way to make it easier for business to pay taxes. In Hong Kong, complying with tax requirements takes about 80 hours annually.
Sixty economies -- from Azerbaijan to Colombia and Lesotho -- have made electronic filing possible, and the list is growing. Last year, the South African Revenue Service embarked on a wide-scale drive towards electronic filing facilities, coupled with the simplified corporate tax return.
PricewaterhouseCoopers estimates this has reduced the time required for corporate tax filings by 50 hours, and for labour taxes by 100 hours.
Only eight economies out of the 181 in the study did not have a corporate income tax system. The study said that corporate income tax was only part of the tax burden placed on business.
In SA, further reforms that will enhance the country's tax competitiveness include the reduction of the corporate tax rate from 29% to 28% and the replacement of Secondary Tax on Companies with a dividend withholding tax.
Eight economies surveyed reduced the number of taxes paid by business.
The Bottom Line is Edited By Edward West
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